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On the effects of non-tariff measures on Brazilian exports

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  • Ferraz, Lucas Pedreira do Couto
  • Ribeiro, Marcel
  • Monasterio, Pedro

Abstract

This article proposes an alternative methodology for estimating the effects of non-tariff measures on trade flows, based on the recent literature on gravity models. A two-stage Heckman selection model is applied to the case of Brazilian exports, where the second stage gravity equation is theoretically grounded on the seminal Melitz model of heterogeneous firms. This extended gravity equation highlights the role played by zero trade flows as well as firm heterogeneity in explaining bilateral trade among countries, two factors usually omitted in traditional gravity specifications found in previous literature. Last, it also proposes a economic rationale for the effects of NTM on trade flows, helping to shed some light on its main operating channels under a rather simple Cournot’s duopolistic competition framework.

Suggested Citation

  • Ferraz, Lucas Pedreira do Couto & Ribeiro, Marcel & Monasterio, Pedro, 2015. "On the effects of non-tariff measures on Brazilian exports," Textos para discussão 403, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    • Handle: RePEc:fgv:eesptd:403
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    1. Guilherme Schneider Rasador & Luciane Franke & Fernanda Cristina Wiebusch Sindelar, 2024. "US–China Trade War: an empirical evaluation regarding its impacts on Brazilian exports," International Economics and Economic Policy, Springer, vol. 21(4), pages 883-906, October.

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